Good morning and thank you, everyone, for inviting us here to speak on behalf of Canada's 90,000 manufacturers and exporters and our association's 2,500 direct members, to express our support for Canada joining the Pacific Alliance.
Manufacturing is the single largest business sector in Canada. The manufacturing industry's contribution is critical for the wealth generation that sustains the standard of living of every Canadian. Industry sales surpassed $600 billion in 2017 for the fourth consecutive year and directly accounted for 11% of Canada's total economic output, while employing over 1.7 million Canadians directly in highly productive, value-added, high-paying jobs.
Manufacturing is an export-intensive business. More than half of Canada's industrial production is exported directly, accounting for roughly 75% of Canada's total exports. In 2017, manufacturing exports to Pacific Alliance countries alone totalled more than $7 billion. While these numbers are impressive, we believe more is possible.
That's why in 2016 CME embarked on an ambitious task to consult with domestic industry on an action plan to double manufacturing output and value-added exports by the year 2030. This initiative, called Industrie 2030, connected with roughly 1,250 business executives from coast to coast. A major pillar of that and the feedback from those executives focused directly on growing exports and helping companies find new customers in domestic and foreign markets. Simply put, in order to grow domestic industry, we must open new markets around the world because Canada's markets are too small. However, simply signing an FTA is not the solution. We must sign FTAs that actually grow exports, not just increase imports.
That being the case, CME has always been clear that no trade agreement is worth signing unless the deal meets three objectives. First, it creates a fair and level playing field for Canadian manufacturers and exporters, and ensures that their opportunity to export into foreign markets is equal to that of our competitors to import into Canada. Second, it increases the amount of value-added exports from Canada, not just the export of natural resources. Finally, it does not undermine the existing integrated manufacturing supply chains developed through previous FTAs, especially the NAFTA.
Free trade agreements are only as beneficial as the amount of new value-added trade they create. Value-added exports create the wealth and prosperity that governments and all Canadians want and expect, but too often in the past, FTAs have not led to these outcomes. Outside of NAFTA, Canada's export record with other countries has been mixed, including those in the Pacific Alliance with which we have existing bilateral FTAs. That does not stop CME from supporting the new proposed agreement, but it should provide us with a point of inflection for how to make this new agreement more successful for Canadian exporters. First, we do fully support the entry into the Pacific Alliance because it does allow us to update and modernize existing frameworks that companies are working within with the countries. Second, and most importantly, while we support the agreement, we believe that Canada can and must do more to ensure successful outcomes for Canadian industry. We believe that in addition to signing the new FTA, we must put in place new supports to help Canadian companies find new markets and customers in the region, especially SMEs.
Canada has many small businesses but not enough medium- and large-sized companies. In fact, over 95% of manufacturers have under 10 employees, and many do not have the internal expertise or financial ability to expand globally. Governments have excellent export support programs, but they should be consolidated to ease access for small companies into new markets.
These actions should include additional funding and support for the trade commissioners service to better connect Canadian exporters to business opportunities in the region; enhanced corporate funding for trade missions, research, and export promotion into the region; an improved export accelerator program, which is currently under way at Global Affairs, to get more companies into the program to take advantage of the coordinated services and opportunities in the region; and an export mentorship program to help companies understand the opportunities in the region from business executives who have done work in the region. Finally, we should look at introducing a new export tax credit for companies that are actively growing exports into that region and beyond.
In addition, if Canada's economy is to grow and create new middle-class jobs through expanded trade, we need to set up the domestic business environment that will enable this growth. This includes having competitive corporate taxes, encouraging small businesses to scale up, and ensuring that trade deals create level playing fields for manufactured goods.
In summary, CME supports Canada's entry into the FTA with the Pacific Alliance, and other trade agreements that expand market access on a reciprocal basis, and that will lead to a prosperous manufacturing sector and Canadian economy. However, we must ensure effective domestic supports to help companies take advantage of these new market opportunities.
Thank you again for inviting me. I look forward to the conversation.